I highly recommend Debian or Ubuntu (server) for domain-0. Here's why:
- Setting up complex networking (bridges, bonded devices, etc) is simple. One file, easy syntax, easy to have scripts do it for you if need be. Do not use the 'network-bridge' script that comes with Xen on a production box, you may need to re-start Xend, which would break all networking (dom-0 and guests)
- Debian and Ubuntu use the apt package manager. Apt is notorious for resolving dependencies very well, letting you search for libraries that you need to compile new tools for Xen (or Xen itself from source, which I recommend).
- Shorewall, which is wildly popular in the Xen community for routed configurations is very easy to use on a Debian based system. Moreover, you can get Steve Kemp's Xen tools as well as the dozen or so that I wrote.
I would not recommend this to someone who wanted Desktop virtualization, I would recommend Fedora. However, as a Xen host with 300 Xen servers in production, I HIGHLY recommend something Debian based. Of course, use what you are comfortable with .. however it might be worth your time to get comfortable with a Debian based distro on dom-0.